A lack of rail cars and trucks hurt International Forest Products’ (TSX:IFP.A) first quarter results, the company announced Wednesday.
The Vancouver-based sawmiller said sales volumes were down 2% to 313 million board feet in the first quarter compared with 2010’s fourth quarter.
Shipping delays and logistical issues were the primary reason for the drop in sales volumes, the company said, noting that shipments to China were down 5% quarter-over-quarter.
Worse yet, the U.S. housing market continues to languish, creating problems for the year ahead.
“Business conditions have deteriorated quite significantly since the end of the first quarter,” president and CEO Duncan Davies said during a conference call Wednesday.
International posted a net loss of $1.7 million in the first quarter compared with an $800,000 profit in 2010’s fourth quarter. Still, the company’s results have improved year-over-year.
International’s net loss totalled $3.8 million in 2010’s first quarter on lumber sales of 264 million board feet.
Lumber shipments have more than doubled since 2010’s first quarter, driving the majority of growth in lumber sales in 2011.
The company doesn’t expect to see any significant improvement in the U.S. housing market in the months ahead, and demand from Asia is expected to continue through 2011 at a “slightly less robust pace of growth.”
Davies said current market conditions could affect the company’s profitability in the months ahead unless a significant uptick in demand occurs.
“The positive price impacts of lumber production being redirected to offshore markets appears to be weakening as increased production has tipped the supply-demand balance resulting in an oversupply of product available to North American markets,” the company said.
At press time, International’s shares were down $0.16 to $5.43.